As technology drives a new ‘vertical world’, the evolution of the Metaverse is likely to be driven by geopolitical competition.
The idea of the Metaverse, which proponents believe to be the next stage of the evolution of the World Wide Web, is increasingly spurring public interest and venture capital investment.
While the concept of the Metaverse remains vague, there is a consensus that a combination of technologies, including augmented and virtual reality (AR + VR), cryptocurrencies and decentralised finance (DeFi) are laying the foundation for an immersive digital world where people will be able to interact and have shared experiences with each other, as well as create, buy and sell digital assets.
Consequently, regulators are set to face a slew of challenges in keeping up with innovation in this new digital space.
Meanwhile, the real world of politics and economics will play a key role in shaping the direction of the Metaverse, too.
As technology triggers polarisation among governments and large organisations and forces global institutions to reconsider grounds for cooperation, the Metaverse is likely to become embroiled in future geopolitical conflicts, argues geopolitical futurist Abishur Prakash.
“The Metaverse is a blank canvas that nations will use to advance their geopolitical agenda,” Prakash, co-founder of Center for Innovating the Future, told TRT World.
In his latest book The World Is Vertical: How Technology Is Remaking Globalization, Prakash argues that technology is causing the world to divide and split, as opposed to the previous idea of the internet, which was supposed to bring the world closer together.
“The main reason why the reverse is now happening with technology is that governments no longer want to attach themselves to the global systems, platforms, and ideas that have governed the world since WWII,” said Prakash. “Now, nations are looking at technology through the lens of sovereignty, ideology, and competitiveness.”
That competitiveness is expressing itself in “vertical decisions” that are being made across the spectrum, from the West jettisoning Chinese 5G networks to the EU cutting data flows to the US.
Now, it’s also emerging with the Metaverse; one of the main issues being which Metaverse(s) will be used and how will they be regulated?
“First, there is no single Metaverse the whole world will use. That means different countries will have their own Metaverse for their own societies and populations. This will split the world along new fault lines,” Prakash argued.
Also, the nature of the Metaverse is different than other technologies like crypto or artificial intelligence (AI) – since it is virtual/augmented, the Metaverse comes pre-built with parameters. “This alleviates some of the concerns that policymakers have, since whatever happens in the Metaverse is not happening in the real world.”
And as we exit the era of single rules for all, there is less incentive for governments and firms to cooperate with one another.
Technologies like AI, quantum computing and cybersecurity are already splitting the Western world itself – as witnessed by a new defence alliance between the US, UK and Australia (AUKUS) that isolated allies like France, Germany and Canada.
So, if there are no international standards yet on something as important as AI ethics despite the expansion of AI-driven technologies into everyday life, could we see something similar happen with the Metaverse?
In the near future, Prakash predicts that governments will be forced to act and create legal frameworks that cover everything in the Metaverse, from economic activity to criminal conduct to political affairs.
This could culminate, he believes, in like-minded governments cooperating with one another to figure out a regional or join-agreement for regulating and monitoring the Metaverse – especially when it comes to areas like terrorist communication or the sharing of confidential data.
Additionally, there are no rules regarding data collection. “Who should be able to access and/or use data collected? A country, a company, an alliance of countries and companies?” Prakash questioned.
Lastly, Prakash highlighted that an era of “meta diplomacy” is about to begin, where governments will conduct diplomacy and relationship building in the Metaverse.” In the latter half of 2021, Barbados became the first nation to establish an embassy in a Metaverse run by Decentraland.
Such a move could set the stage for more countries looking to build diplomatic relationships within the Metaverse, and how states pursue international relations and geopolitics could consequently move in a new direction.
Emerging mini-Metaverses are already starting to break down along geopolitical lines.
Take Chinese super-app WeChat, which is unlikely to be compatible or portable to other jurisdictions. Others like streaming video app TikTok, have shown the ability to operate across cultures and are incredibly popular outside of China.
However, great power competition – as witnessed between the US and China – is likely to bleed into the Metaverse too, and has already had to some degree with the decoupling of data flows and applications.
For example, Beijing is blocking any move to allow blockchain-based decentralised economies to develop within China that would be outside its control. To counter it, Beijing is pursuing a strategy to roll out its own central bank digital currency (CBDC) and backing the launch of the Blockchain Services Network (BSN), intended to be a low-cost platform for establishing blockchain apps and helping Chinese firms grow in the space.
Does this mean a Metaverse “with Chinese characteristics” running on Chinese hardware could be on the horizon? One that could be pitted against a more democratic-centric decentralised version?
Prakash believes ideology is likely to be integral to the Metaverse and understanding its significance will be crucial.
“Future generations will spend vast amounts of time in virtual worlds, from learning subjects to working in jobs,” he said. “This means the ‘design’ of these worlds will shape their beliefs and behaviours.”
While the focus might be on how geopolitics will impact the Metaverse, we should also think about how the Metaverse will subsequently affect geopolitics, Prakash added.
More broadly, as the Metaverse gains commercial interest by attracting users and money, many of the issues that need to be managed across virtual environments with potentially billions of users will require new multilateral mechanisms for regulatory collaboration.